Biodiesel and renewable diesel consumption is, for the first time in U.S. history, set to surpass 5 billion gallons in 2025, according to a new report from the Clean Fuels Alliance America.
This estimation comes following a record year for both low carbon fuels (LCF) as states pushed to drive adoption rates away from traditional diesel. Additionally, updated technical standards, growth in the soybean crush capacity, and greater public support for clean fuels helped contribute to this trend.
“Consumers and corporations are demanding more clean fuel, and they are increasingly turning to biodiesel and renewable diesel to meet those demands,” said Clean Fuels Alliance America CEO Donnell Rehagen. “Our industry has become a central force in the global effort to curb greenhouse gas emissions.”
Some of the states whose policies helped increase the use of clean fuels include:
- New Mexico: Became the fourth state to implement a Clean Transportation Fuel Standard.
- Nebraska: The state expanded its biodiesel retail program to allow for more participation from state fuel retailers. Nebraska also became the latest state to pass incentives for the in-state production of sustainable aviation fuel (SAF).
- California: Biodiesel and renewable diesel grew under the state’s Low Carbon Fuel Standard. The two fuels are now 75 percent of California’s diesel fuel supply, and they generate more credits (45 percent) than any other fuel type.
- Iowa: Numbers released this year show Iowa reached a record 486.5 million gallons of biodiesel sales in 2023, nearly triple the 2007 volume, driven by state incentives like tax credits and infrastructure investments. This growth solidifies Iowa’s leadership in renewable energy, benefiting the agricultural sector, boosting local economies, and making biodiesel a key player in the state’s diesel market, now accounting for 58.7 percent of sales.
Biodiesel and renewable diesel are commonly used in aviation, marine, and rail, and heavy-duty transportation, thus making them especially attractive for trucking fleets.
Last November, the California Air Resources Board (CARB) approved stricter policies towards the state's Low Carbon Fuel Standard (LFCS), a 2011 rule designed to increase the use of low-carbon fuels to reduce greenhouse gas emissions from the transportation industry. To date, the LCFS has decreased California's fuel mix carbon intensity by almost 13 percent, resulting in a 70 percent elimination of traditional diesel.
[Related: California regulators approve stricter rules for low carbon fuels]
However, the approved updates include specific targets to drastically cut carbon intensity by, among other forcing trucking fleets to adopt zero-emissions vehicles. Another and more immediate concern opponents claim the updates will bring are higher fuel prices though CARB denies this.
[Related: California lawmakers are challenging CARB's latest controversial rule]
Despite this, the Clean Fuels Alliance and fellow industry experts introduced updated fuel specifications last year, such as higher biodiesel blends to better accommodate modern combustion engines. Producing bio and renewable diesel requires more than 1 billion pounds of soybean oil monthly, thus creating a 30 percent increase in crush capacity. Another 20 processing plants or expansions of existing ones is currently underway.
